WHAT ARE ‘WHITE COLLAR CRIMES’?

White-collar crimes refer to financially motivated nonviolent crimes committed by business and government professionals. The term comes from an incorrect generalization that white collar crimes are committed by executives who work in white shirt.

White-collar crimes can be difficult to prosecute because the perpetrators rely on their professions to use sophisticated means and conceal their activities through a series of complex transactions. Victimization is not as obvious as in violent crimes because harm is usually spread out over a substantial number of victims, nonetheless, the monetary sums that are involved tend to be quite important.

The general characteristics of white-collar crime include:

The harm caused affect broad section of the community rather than specific individuals

The impact can consist of financial or environmental harms rather than clear corporeal injuries

The effects of offences can only be fully appreciated over time

The offence must involve moral wrongdoing rather than harm alone.

Most white-collar crimes are prosecuted by Government lawyers (Prosecutors).

WHO REGULATES AUSTRALIA’S FINANCIAL MARKETS?

The Australian Securities and Investment Commission (ASIC) is Australia’s corporate, markets and financial services regulator. Under the guidance of the ASIC Act, the Corporations Act and the Crimes Act, ASIC ensures that Australia’s financial markets are fair and transparent, supported by confident and informed investors and consumers.

For more information on ASIC’s role and activities, please refer to its website.

WHAT ARE THE MOST COMMON WHITE COLLAR OFFENCES?

White-collar crimes is a broad term that encompasses many types of nonviolent criminal offences.

The most common white-collar offenses include:

Bribery

Embezzlement

Forgery

Fraud

Identity theft

Insider trading

Money laundering

Bribery

Bribery is an act of giving money or giving gift to alter the behaviour of the recipient.

Under section 141 of the Criminal Code 1995 (Cth),

“a person is guilty of an offence if a person dishonestly provides a benefit to another person or causes a benefit to be provided to another person […] and the person does so with the intention of influencing a public official in the exercise of the official’s duties as a public official […]”.

In addition, under section 141 of the Criminal Code 1995 (Cth),

“a commonwealth public official is guilty of an offence if the official dishonestly asks for a benefit for himself/herself or receives a benefit for himself/herself […] and the official does so with the intention that the exercise of the official’s duties will be influenced or of inducing, fostering or sustaining a belief that the exercise of the official’s duties will be influenced”.

Embezzlement is the act of dishonestly withholding assets for the purpose of conversion (theft) of such assets by one or more individuals to whim such assets have been entrusted, to be held and/or used for other purposes.

Under section 160 of the Crimes Act 1900 (NSW),

“whosoever, being employed in the Public service, fraudulently embezzles any property or any part thereof, so intrusted to him/her, or taken into his/her possession, or being in his/her custody or control, or fraudulently secretes, removes or in any matter fraudulently applies or deposes of the same”.

Maximum penalty: imprisonment for 10 years.

Forgery

Forgery is the process of making, adapting or imitation objects, statistics or documents with the intent to deceive.

Under section 253 of the Crimes Act 1900 (NSW),

“a person who makes a false document with the intention that the person or another will use it to induce some person to accept it as genuine and because of it being accepted as genuine to obtain any property belonging to another, or to obtain any financial advantage, or to cause any financial disadvantage, or to influence the exercise of a public duty, is guilty of the offence of surgery”.

Maximum penalty: imprisonment for 10 years.

Fraud

Fraud is a deception deliberately practiced in order to secure unfair or unlawful gain.

Please note that a person’s obtaining of property belonging to another may be dishonest even if the person is willing to pay for the property.

Maximum penalty: imprisonment for 7 years.

Identity theft

Identity theft is a form of stealing someone’s identity in which someone pretends to be someone else by assuming that person’s identity, usually as a method to gain access to resource or obtain credit and other benefits in that person’s name.

Under section 192J of the Crimes Act 1900 (NSW),

“a person who deals in identification information with the intention of committing or of facilitating the commission of an indictable offence if guilty of an offence”.

Maximum penalty: imprisonment for 10 years.

In addition, under section 192L of the Crimes Act 1900 (NSW),

“a person who possesses any equipment, material or other thing that is capable of being used to make a document or other thing containing identification information and intends that the document or nothing made will be used to commit or to facilitate the commission of an indictable offence is guilty of an offence”.

Maximum penalty: imprisonment for 3 years.

Insider trading

Insider trading is the trading of a public company’s stock or other securities (such as bonds or stock options) by individuals with access to non-public information about the company.

An insider is defined as

“a person [who] possesses information that is not generally available but, if the information were generally available, a reasonable person would expect it to have a material effect on the price or value of securities of a body corporate […].”

Under section 1002G of the Corporations Act 2001,

“where trading is permitted on the stock market of a securities exchange, the insider must not, directly or indirectly communicate the information or cause the information to be communicated to another person is the insider known or ought reasonably to know that the other person would subscribe for or enter into an agreement to sell or purchase any such securities or procure a third person to subscribe for or enter into an agreement to sell or purchase any such securities […]”.

Maximum penalty for an individual: imprisonment for 10 years and/or a fine of $450,000.

Maximum penalty for a company: fine of $1.1 million.

Money laundering

Money laundering is the process whereby the proceeds of crime are transformed into ostensibly money or other assets.

Under section 193B of the Crimes Act 1900 (NSW),

“a person who deals with proceeds if crime, knowing that it is proceeds of crime and intending to conceal that it is proceeds of crime, is guilty of an offence.”

Maximum penalty: imprisonment for 20 years.

Please note that a person who deals with proceeds of crime being reckless as to whether it is proceeds of crime is also guilty of committed money laundering and can be imprisoned for up to 10 years.

WHAT FACTORS DO THE COURTS TAKE INTO ACCOUNT?

The following features have been identified as influencing the assessment of the gravity of the crime:

The amount of money involved;

The length of time over which the offences are committed;

The motive for the crime;

The degree of planning and sophistication;

An accompanying breach of trust;

The impact on public confidence;

The impact on the victim.

For more information, please refer to the Judicial Commission of New South Wales.

If you are currently being investigated for committing a white-collar crime, please do not hesitate to contact GMH Legal. Our experienced criminal law team advises clients who are concerned about their exposures to the legal risks associated with white-collar crimes or who find themselves confronted with evidence of fraud and other crimes within their organisation.